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Pension research

March 17, 2013

A recent letter to the editor mentioned that employer pension contributions for PA teachers will be 2.2 percent in the coming years....

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(34)

Bufftrev1

Mar-18-13 5:58 AM

Hi laughin.. yes, I admit I missed the part where you said that. Do you not see that I too was a classroom teacher and that I am on this forum advocating for the profession?

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LaughIn

Mar-18-13 12:45 AM

Bufftrev, you do not pay close attention do you? I am a retired educator.

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mikekerstetter

Mar-17-13 7:35 PM

philunderwood-"There IS a big difference, Mike."

Phil, I know what the difference is, my point is that if the new law says the government will put in a certain amount or percentage and they don't (like they did with the current system) you are back to where we are now, with the government (taxpayers) being on the hook for that amount they didn't put in. The only thing switching to a 402k protects against is poor performing investments, but that isn't the major cause for the problem in this case.

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mikekerstetter

Mar-17-13 7:28 PM

valves-"The key is that the deal is not offered, it is DEMANDED by the union thugs. We are then held hostage by threats of a strike, tantamount to a child threatening to hold his breath, if the demand is not met."

Hi valves, been a while since we've seen that screen name.

Your assertion above is completely wrong as it pertains to public pensions here in PA. PSERS pensions are not negotiable under PA law. The pensions are set by legislation, you know voted upon by the PA House, Senate and signed by the Governor at the time. Neither the Unions nor teachers had any part in it.

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Bufftrev1

Mar-17-13 7:14 PM

Hi laughin.. I feel compelled to ask you, how much time have you spent recently in a public classroom? If, like the majority of people, the answer is none, then perhaps you do not fully understand all that is required of a modern teacher. I'd like to add further that teachers incomes are modest, at best, and typically lower than professionals with similar levels of education. A wall street professional with an mba, an engineer with a masters degree, and any other professionals with advanced degrees generally earn higher salaries, the trade off has always been teachers will have a comfortable retirement for their services. The reality of todays economic world does mean teachers may have too pay more for benefits currently and recieve adjusted benefits later, but it isn't teachers modest salaries that caused our financial system to collapse in '07 or own beach homes.. and lastly, if you truly believe teachers enjoy an enviable lifestyle, why didn't you become one?

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valves

Mar-17-13 6:38 PM

radioactive

Mar-17-13 9:30 AM

So, why do you begrudge teachers for wanting? I'm sure if you were offered such a package that you would not hold up your hand in a stop that fashion and say, "oh, no, I don't deserve that."

The key is that the deal is not offered, it is DEMANDED by the union thugs. We are then held hostage by threats of a strike, tantamount to a child threatening to hold his breath, if the demand is not met.

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LaughIn

Mar-17-13 6:30 PM

Taxpayer will pay the difference for the grandfathered pension holders and current wages should reflect accountability to evaluations. I have heard a lot of talk about the Bible, but I do not watch Tv.

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Bufftrev1

Mar-17-13 6:11 PM

Hi laughin.. please re read mikes last post, it is both accurate and pragmatic. The fact that the government is funded by taxpayers money is also accurate, though not a revelation.. watching the bible on history channel, is.. entertaining.

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philunderwood

Mar-17-13 6:08 PM

Defined benefit plans relay upon future payments and may or may not be fully funded. Defined contribution plans consist of payments into your 401K plan, usually in addition to your own contributions and are recorded in real time. You can check your balance any time you want to. If government isn’t doing its part, you’ll know it with a defined contribution plan. Unlike a defined benefit plan, you have control of your 402K investments. There IS a big difference, Mike.

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LaughIn

Mar-17-13 4:33 PM

Please re-read my last post! The taxpayers is your answer to everything. They are funding all forms of government NOW. Government money=working mans dollars.

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mikekerstetter

Mar-17-13 3:48 PM

Laughin, the Government has to make up for it as far as current employees/retirees are concerned. There is no getting around it. Yep, they'll do it with tax money they should have put there to begin with, only now it will be painful for the taxpayers.

With that said, do you really believe changing the system to a defined contribution plan will prevent this from happening again? You do realize the new plan calls for the Government to put funds into the system, right? And the old system called for the Government to put funds in that system, and they didn't, which caused most of the problem. SO what makes you think the Government won't stop putting money into the new system?

If you think the new system will be different, why is that?

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LaughIn

Mar-17-13 2:20 PM

I know I am right Mike and if you think for one minute that the government is going to make up for their failure, good luck. Everyone and I mean every taxpayer will be paying for it, not just the entitled. Happy St. Patrick's day all.

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mikekerstetter

Mar-17-13 1:33 PM

LaughIn-"Grandfathered contracts and pensions need to be upheld, but the pension reform now in the governments pipeline will change future hires. The problem that is now occurring is a direct result of poor planning and the economy."

The biggest factor involving the current mess is the Governments failure to put in the money they should have been putting in.

You are right that current proposals will change the system for new hires. But if the Government fails to put in their share of the money you will be right back to where were are now.

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mikekerstetter

Mar-17-13 1:26 PM

Zippie-"What would happen if you replaced the words - government, unions, schools, teachers - and inserted names of small businesses and companies. Would they be treated the same and given the same respect?"

In my opinion, no. If small business and companies told their employees that they were putting money into an account for their retirement and didn't, private employers would be held criminally liable. Of course, that is just my opinion.

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Zippie

Mar-17-13 12:52 PM

What would happen if you replaced the words - government, unions, schools, teachers - and inserted names of small businesses and companies.

Would they be treated the same and given the same respect?

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LaughIn

Mar-17-13 11:40 AM

Grandfathered contracts and pensions need to be upheld, but the pension reform now in the governments pipeline will change future hires. The problem that is now occurring is a direct result of poor planning and the economy.

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Bufftrev1

Mar-17-13 11:12 AM

Rock on, mike..!

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Bufftrev1

Mar-17-13 11:12 AM

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mikekerstetter

Mar-17-13 11:01 AM

Cont'd...

Don't forget that many of those employees take those jobs at a lower wage than they could make working in the private sector with the understanding that they will receive that pension for their service. And they forfeit part of that lower pay each pay day to that pension fund. The reason that fund isn't totally broke is because the employees kept it going with their own money when the Employer failed to put in their share.

I get tired of hearing people whine about public employees pensions when they don't have a clue how they work or why they are in the shape they are in. It's not at all the fault of those faithful employees and they shouldn't suffer because of the Governments failure to fund their mandate.

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mikekerstetter

Mar-17-13 10:55 AM

enigma-"Mike and David, What ever happened to shared sacrifice? It's OK when someone else is 'sharing' but not when it's you? When the rich are over taxed, that's good, but when your bloated pension is threatend for the fiscal good, that is off limits. Yeah, I know, you were promised that bloated pension."

You're barking up the wrong tree. I've argued many times that the 'tax the rich' approach was wrong and unfair. In fact I've said that the 47% who pay nothing in federal income tax ought to be paying their share.

And bloated? By who's standards? You sound more like a liberal here with your 'I don't get it so why should you' mantra.

Public employees are sharing in the sacrifice. Research contracts over the last 10 years and see how many years there were no raises, how much vacation/sick time and holidays were lost and how much more they are paying towards their benefits. Like many in the private sector, sometimes it adds up to a net loss in wage packages.

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philunderwood

Mar-17-13 8:50 AM

Regardless of how we got into the mess, people who took jobs and worked under legal agreements concerning their pay, pensions and health insurance aren’t to blame for utilizing those benefits. What happened is governments not budgeting their incomes and outgoes to prevent these kinds of problems. If taxpayers knew how much government cost on a real time basis, politicians would run on a platform of reducing the cost of government instead of promising ever more benefits.

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enigma

Mar-17-13 7:59 AM

Mike and David, What ever happened to shared sacrifice? It's OK when someone else is 'sharing' but not when it's you? When the rich are over taxed, that's good, but when your bloated pension is threatend for the fiscal good, that is off limits. Yeah, I know, you were promised that bloated pension. And I was promised Social Security, but it's broke and something needs to give or no one will get anything in a few years. In both cases, the government tried to have it both ways in the past and we will pay for it in the future. It's not right, but it's what we have to deal with now and the longer people demand their money (which isn't there) the worse the crash will be.

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mikekerstetter

Mar-17-13 7:54 AM

David, I knew what you meant. I wasn't clear enough. I don't think the Unions knew what was going on until long after it was being done, which is probably why you heard nothing from them.

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mikekerstetter

Mar-17-13 7:51 AM

mikekerstetter-"Premier, no, because the Employer Contribution rate was also raised at that time."

After rereading my comment, I realized I made a mistake. It should read that the EMPLOYEE Contribution rate was raised, not the Employer.

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eriklatranyi

Mar-17-13 7:37 AM

This is what happens when you put your faith into the hands of a gov't that is not bound by the same rules that the rest of us have to obey.

This sounds like Social Security and the situation in Greece (and most of Western Europe), where there are no funds, just a bunch of IOUs and the current revenue stream will not be enough to meet current payments at some point.

Austerity will happen and it will not be pretty.

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